Title:
The Effect of Digital Financial Literacy on Financial Inclusion Among Small and Medium Enterprises in Mwanza City, Tanzania: Implications for Tanzania Development Vision 2050

Authors:
Maria Columba Stanslaus & Sr Agripina Sagabho, Tanzania

Abstract:

This study examined the effect of digital financial literacy on financial inclusion among Small and Medium Enterprises (SMEs) in Mwanza City, Tanzania, and its implications for achieving Tanzania Development Vision 2050. Specifically, the study examined the effects of digital financial knowledge, digital financial skills, and cybersecurity awareness on financial inclusion among SMEs. The study employed a quantitative approach using an explanatory cross-sectional research design guided by the Diffusion of Innovation Theory and Financial Capability Theory. A sample of 303 SME owners and managers was selected from a target population of 1,248 registered SMEs operating in Mwanza City using stratified random sampling. Primary data were collected using structured Likert-scale questionnaires. The reliability of the research instrument was confirmed using Cronbach's Alpha coefficients above 0.80 for all study variables. Data were analyzed using descriptive statistics, Pearson correlation, and Ordinary Least Squares (OLS) regression. Diagnostic tests confirmed that the assumptions of normality, multicollinearity, heteroscedasticity, and autocorrelation were satisfied. The findings revealed that digital financial knowledge (β = 0.318, p<0.001), digital financial skills (β = 0.352, p<0.001), and cybersecurity awareness (β = 0.276, p<0.001) have positive and statistically significant effects on financial inclusion among SMEs. Digital financial skills demonstrated the strongest influence on financial inclusion. The study concludes that improving digital financial literacy enhances SMEs' access to and effective use of formal financial services, thereby promoting enterprise growth, innovation, employment creation, and inclusive economic development. The study recommends strengthening digital financial education programmes, expanding digital financial infrastructure, improving cybersecurity awareness, and promoting partnerships between financial institutions and SME support organizations to accelerate the implementation of Tanzania Development Vision 2050.

DOI: https://doi.org/10.51505/IJEBMR.2026.11002